SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant X
Filed by a Party other than the Registrant ___
Check the appropriate box:
__ Preliminary Proxy Statement
__ Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
X Definitive Proxy Statement
__ Definitive Additional Materials
__ Soliciting Material Pursuant to <section> 240.14a-11(c) or
<section> 240.14a-12
WAUSAU-MOSINEE PAPER CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required
__ Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and
0-11.
__ Fee paid previously with preliminary materials.
__ Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
(1) Amount Previously Paid: ___________________________
(2) Form, Schedule or Registration Statement No:______________
(3) Filing Party: ___________________________
(4) Date Filed: ___________________________
WAUSAU-MOSINEE PAPER CORPORATION
1244 KRONENWETTER DRIVE
MOSINEE, WISCONSIN 54455-9099
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
_____________________
The annual meeting of shareholders of Wausau-Mosinee Paper Corporation
will be held at The Wausau Club, 309 McClellan Street, Wausau, Wisconsin, on
Thursday, April 19, 2001, at 2:00 p.m., local time. The following proposals
will be considered by shareholders at the annual meeting:
1. The election of three Class II directors;
2. Approval of the Wausau-Mosinee Paper Corporation 2000 Stock Option
Plan; and
3. Any other business that properly comes before the meeting.
The record date for determining the holders of common stock entitled
to notice of and to vote at the annual meeting or any adjournment thereof
is the close of business on February 22, 2001.
PLEASE PROMPTLY VOTE, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE
ENCLOSED ENVELOPE.
March 19, 2001
By order of
the Board of Directors
GARY P. PETERSON
Gary P. Peterson
Secretary
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WAUSAU-MOSINEE PAPER CORPORATION MARCH 19, 2001
1244 KRONENWETTER DRIVE
MOSINEE, WISCONSIN 54455-9099
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 19, 2001
SOLICITATION OF PROXIES
We are providing these proxy materials in connection with the solicitation
of proxies by the Board of Directors of Wausau-Mosinee Paper Corporation for
use at the 2001 annual meeting of shareholders, including any adjournment
thereof. The annual meeting will be held at 2:00 p.m., at The Wausau
Club, 309 McClellan Street, Wausau, Wisconsin on April 19, 2001.
PROXIES AND VOTING PROCEDURES
YOUR VOTE
Your vote is important. Whether or not you plan to attend the annual
meeting, please sign, date and return the enclosed proxy promptly in order
to be sure that your shares are voted. You may revoke your proxy at any
time before it is voted by giving written notice to the Secretary of the
company at our principal office in Mosinee, Wisconsin, by filing another
duly executed proxy bearing a later date with the Secretary or by giving
oral notice to the presiding officer at the annual meeting.
All shares represented by your properly completed proxies which have
been submitted to the company prior to the meeting (and which have not
been revoked) will be voted in accordance with your instructions. IF YOU
DO NOT INDICATE HOW YOUR SHARES SHOULD BE VOTED ON A PROPOSAL, THE SHARES
REPRESENTED BY YOUR PROPERLY COMPLETED PROXY WILL BE VOTED AS THE BOARD OF
DIRECTORS RECOMMENDS.
If any other matters are properly presented at the annual meeting for
consideration, including, among other things, consideration of a motion to
adjourn the meeting to another time or place, the persons named as proxies
in the proxy form furnished to you by the Board will have discretion to
vote on those matters according to their best judgment to the same extent
as you would be entitled to vote. At the date this proxy statement went to
press, we did not anticipate that any other matters would be raised at the
annual meeting.
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SHAREHOLDERS ENTITLED TO VOTE
GENERAL. Shareholders at the close of business on the record date are
entitled to notice of and to vote at the annual meeting Each share is
entitled to one vote on each proposal properly brought before the annual
meeting. Votes cast by proxy or in person at the annual meeting will be
tabulated by an inspector of elections appointed by the Board. On the
record date, there were 51,388,891 shares of common stock outstanding.
DIVIDEND REINVESTMENT PLAN AND COMMON STOCK PURCHASE PLAN
PARTICIPANTS. If you are a participant in the Dividend Reinvestment and
Stock Purchase Plan or Common Stock Purchase Plan, your proxy will also
serve to direct the plan administrator to vote any shares of common stock
held for you under either plan at the close of business on the record
date. Shares beneficially owned by participants in the plans for which no
proxy or other voting directions are received will not be voted. You will
receive a separate form of proxy for the shares held in the plans.
401(K) PLAN PARTICIPANTS. If you are a participant in our 401(k) plan
you may vote an amount of shares equivalent to the interest in our common
stock credited to your account as of the record date. You will receive
one proxy card for all shares you own through the plan. That proxy card
will serve as voting instructions for the trustee of the 401(k) plan. If
you own shares through the 401(k) plan and do not vote, the plan trustees
will vote the plan shares in the same proportion as shares for which
instructions were received under the plan.
QUORUM, REQUIRED VOTE AND RELATED MATTERS
QUORUM. A quorum is present if a majority of the votes entitled to
be cast on a proposal are represented at the annual meeting in person or
by proxy. For purposes of determining a quorum, shareholders who are
present in person or are represented by proxy, but who abstain from
voting, are considered present and count toward the determination of the
quorum. Shares reported as broker non-votes are also considered to be
shares present for purposes of determining whether a quorum is present.
BROKER NON-VOTES. If you hold shares in "street name" through a
broker or other nominee, your broker or nominee may not be permitted to
exercise voting discretion with respect to some of the proposals to be
voted upon. Brokers or nominees who are the holders of record of company
common stock for customers generally have discretionary authority to vote
on certain routine matters. However, such brokers generally will not have
authority to vote on other matters if they have not received instructions
from their customers. If you do not give your broker or nominee specific
instructions, your shares may not be voted on those proposals or counted
in determining the number of shares necessary for approval. In
determining the vote of a shareholder on matters for which a broker or
nominee does not have the authority to vote shares held of record by the
broker or nominee, the shares will be recorded as a "broker non-vote."
ELECTION OF DIRECTORS. Directors are elected by a plurality of the
votes cast. For this purpose, a "plurality" means that the individuals
receiving the largest number of votes are elected as directors, up to the
maximum of three directors to be chosen at the annual meeting. You may
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vote in favor of the nominees specified on the accompanying proxy form or
may withhold your vote as to one or more of such nominees. Shares
withheld or not otherwise voted in the election of directors (because of
abstention, broker non-vote, or otherwise) will have no effect on the
election of directors.
ALL OTHER PROPOSALS. Proposal No. 2 (the 2000 Stock Option Plan) will
be approved if a majority of the shares of stock represented and voted at
the annual meeting vote for approval, provided that a majority of the
outstanding shares of stock are voted on the proposal. Therefore, broker
non-votes will have an effect on Proposal No. 2 only if a majority of the
outstanding shares are not otherwise voted on the proposal.
COSTS OF SOLICITATION
In addition to solicitation by mail, our officers, directors and
regular employees may solicit proxies in person or by telephone,
facsimile, electronic mail or other forms of communication. Expenses in
connection with the solicitation of proxies, including the reasonable
expenses of brokers, fiduciaries and other nominees in forwarding proxy
material to beneficial owners of our common stock, will be borne by us.
PROXY STATEMENT PROPOSALS
Any shareholder who intends to present a proposal at the annual
meeting to be held in 2002 must deliver the written proposal to the
Secretary of the company at our office in Mosinee, Wisconsin:
<circle>not later than November 19, 2001, if the proposal is submitted
for inclusion in our proxy materials for the 2002 meeting
pursuant to Rule 14a-8 under the Securities Exchange Act of
1934; or
<circle>on or after January 19, 2002, and on or before February 18,
2002, if the proposal is submitted pursuant to our bylaws, in
which case we are not required to include the proposal in our
proxy materials.
Shareholders may present a proposal at the 2002 annual meeting for
consideration only if proper notice of the proposal has been given in
accordance with one of these requirements. Nominations from the floor at
the annual meeting of shareholders to be held in 2002 requires advance
notice in accordance with the bylaws.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
At the annual meeting, shareholders will be asked to elect three Class
II directors for terms of office which will expire at the annual meeting
of shareholders to be held in 2004. Harry R. Baker, Dennis J. Kuester and
Richard L. Radt have been nominated by the Nominating Committee of the
Board for election as Class II directors. Each of the candidates has
consented to serve if elected, but in the event one or more of the
nominees is not a candidate at the annual meeting, it is the intention of
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the proxies to vote for such substitute or substitutes as may be
designated by the Nominating Committee.
Richard G. Jacobus has reached mandatory retirement age under the
Board's policy and will not be a candidate for reelection. Mr. Jacobus
served as a director since 1997 and as a director of our Mosinee Paper
Corporation subsidiary from 1985 to 1997.
The Board is composed of three classes consisting of three Class I and
Class II directors, respectively, and two Class III directors. One class
of directors is to be elected at each annual meeting of shareholders to
serve a three-year term. No person may be elected a director if that
person has attained age 70 as of the date of the election.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE THREE
NOMINEES FOR CLASS II DIRECTOR. The following information is furnished
with respect to the nominees and all continuing directors:
PRINCIPAL OCCUPATION CLASS AND YEAR
AND OTHER WHICH TERM DIRECTOR
NAME AND AGE DIRECTORSHIPS WILL EXPIRE SINCE
NOMINEES
Harry R. Baker, 68 Former President and Chief Class II 1992
Executive Officer, Marathon Electric 2004
Manufacturing Corporation
(1989-1998); formerly a director of
Mosinee (1995-1997)
Richard L. Radt, 69 Vice Chairman of the Board of the Class II 1997
Company; President and Chief Executive 2004
Officer and a director of the Company
(1977-1987); formerly Vice Chairman
(1993-1997) and President and Chief
Executive Officer (1988-1993) of Mosinee
Dennis J. Kuester, 59 President and director of Marshall & Ilsley Class II -
Corporation; also President of M&I 2004
Marshall & Ilsley Bank and Chairman
of the Board and director of Metavante
Corporation and a director of Modine
Manufacturing Company
CONTINUING DIRECTORS
Walter Alexander, 66 President of Alexander Lumber Class I 1997
Co.; also a director of Old Second 2003
Bancorp, Inc.; formerly a director
of Mosinee (1987-1997)
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San W. Orr, Jr., 59 Chairman of the Board of the Company Class I 1970
and Advisor, Estate of A.P. Woodson 2003
and Family; Chief Executive Officer
of the Company (2000; 1994-1995);
formerly Chairman of the Board
(1987-1997) and a director (1972-1997)
of Mosinee Paper Corporation; also a
director of Marshall & Ilsley Corporation
David B. Smith, Jr., 62 Consultant; formerly Vice President, Class I 1972
Labor Relations, Weyerhaeuser Company 2003
Gary W. Freels, 52 President, Alexander Properties, Inc. Class III 1996
(investment management); formerly 2002
President, M&I First American
Bank (1992-1995)
Thomas J. Howatt, 51 President and Chief Executive Officer Class III 2000
of the company since August, 2000; 2002
formerly Senior Vice President, Printing
& Writing Group (1997-2000) and
Vice President and General Manager,
Printing & Writing Division (1993-1997)
COMMITTEES AND MEETINGS
The Board appointed audit, compensation, and nominating committees for
the last fiscal year.
The Audit Committee, consisting of Messrs. Jacobus, Alexander, Baker
and Freels, met seven times during the last fiscal year. The Audit
Committee reviews our financial reports, our internal system of financial
controls and the appointment, independence and performance of our
independent auditors. The members of the committee also serve on the
Board's Oversight Committee which is charged with the administration of
our program to maintain legal and ethical standards. See "Report of the
Audit Committee."
The Executive Compensation & Bonus Committee consists of Messrs. Orr,
Baker, Jacobus and Smith. The Committee met three times during the last
fiscal year to review management compensation matters. The Board's Option
and SAR Committee reviews and grants, as it deems appropriate, options,
stock appreciation rights, and dividend equivalents. See "Committees'
Report on Compensation Policies."
The Nominating Committee consists of Messrs. Orr, Alexander, Freels
and Radt. The Nominating Committee met once in 2000 to consider and
recommend to the Board nominees for election as directors. Inquiries
concerning nominations with pertinent background information should be
directed to the Chairman of the Nominating Committee in care of the
company.
During the last fiscal year the Board met nine times. Each of the
directors attended at least 75% of the aggregate number of the meetings of
the Board and the committees on which they served during the last fiscal
year.
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REPORT OF THE AUDIT COMMITTEE
The Audit Committee is appointed by the Board of Directors to assist
the Board in monitoring (1) the integrity of the company's financial
statements, (2) compliance by the company with legal and regulatory
requirements and (3) the independence and the performance of the company's
independent auditors.
The Audit Committee operates under a charter which was adopted by the
Board. As required by the charter, each member of the Audit Committee
meets the independence and experience standards of the New York Stock
Exchange listing requirements. The Audit Committee charter is set forth
as Appendix A to this proxy statement.
This report summarizes the actions of the Audit Committee with respect
to the company's financial statements for the last fiscal year.
Management has primary responsibility for the company's financial
statements and the overall reporting process. The Audit Committee
periodically met with management, other company financial personnel and
representatives of Wipfli Ullrich Bertelson, LLP ("Wipfli"), the company's
independent auditors, to review and discuss the financial statements prior
to their issuance and to discuss significant accounting issues.
Management advised the Audit Committee that all financial statements were
prepared in accordance with generally accepted accounting principles and
the committee discussed the statements with both management and the
independent auditors. The Audit Committee's review of the financial
statements included discussion with the independent auditors of matters
required to be discussed pursuant to Statement on Auditing Standards No.
61 (Communication With Audit Committees).
Management also has primary responsibility for the company's system of
internal controls. The Audit Committee discussed the company's system of
internal controls with its senior internal auditing executive and
discussed the internal audit department's responsibilities, budget and
staffing with Wipfli.
The Audit Committee is responsible for matters concerning the
relationship between the company and its independent auditors, including
recommending their appointment or removal, reviewing the scope of their
audit services and related fees, reviewing and approving any other
services being provided to the company and determining whether the
auditors are independent.
The Audit Committee received from Wipfli the written disclosure and
the letter relating to the independence of the firm required by the
Independence Standards Board Standard No. 1 (Independence Discussions with
Audit Committees). The Audit Committee also discussed with Wipfli the
independence of the firm for the purposes of expressing an opinion on the
company's financial statements and considered whether the provision of
nonaudit services is compatible with maintaining the independence of the
firm. During the last fiscal year, Wipfli billed aggregate fees for
various services in the following categories:
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AUDIT FEES
Audit fees for professional services rendered for the audit of the
company's financial statements for fiscal year 2000 and review of the
unaudited financial statements included in the company's quarterly reports
on Form 10-Q were $198,010.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The firm did not perform any professional services in 2000 with
respect to the company's information systems, management of the company's
local area network, or the design or implementation of a hardware or
software system that aggregates source data for the company's financial
statements or generates information significant to the statements.
ALL OTHER FEES
The firm's aggregate fees billed in 2000 for services to the company
other than fees for services described under "Audit Fees" were $198,692.
These fees represented professional services relating primarily to
accounting, tax issues and the audit of the company's pension plans.
On the basis of its reviews and discussions concerning the financial
statements and the independence of the auditors described above, the Audit
Committee recommended to the Board of Directors that it approve the
inclusion of the company's audited financial statements in the company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2000,
for filing with the Securities and Exchange Commission.
This report does not constitute soliciting material and should not be
deemed filed or incorporated by reference into any other company filing
under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent the company specifically incorporates this report by
reference therein.
MEMBERS OF THE AUDIT COMMITTEE
Richard G. Jacobus (Chairman)
Walter Alexander
Harry R. Baker
Gary W. Freels
RELATIONSHIP WITH INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee, the Board has
appointed Wipfli Ullrich Bertelson LLP as independent auditors to audit
the books, records and accounts of the company for the fiscal year ending
December 31, 2001. Representatives of Wipfli Ullrich Bertelson LLP will
be present at the annual meeting and will have an opportunity to make a
statement or respond to appropriate questions.
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DIRECTOR COMPENSATION
Directors are paid a retainer of $2,000 per month and $1,000 for each
meeting of the Board attended. Mr. Smith participates in our health
insurance plan and the other directors who are officers of the company
receive salaries and benefits related to their duties. No other director
received more than the standard arrangements described above.
The Directors' Deferred Compensation Plan provides that directors may
elect each year to defer fees otherwise payable in cash during the year.
Amounts deferred become payable in a lump sum or in quarterly installments
after the director's termination of service. In the event a director's
service terminates because of a change of control of the company, as
defined in the plan, payment of all deferred amounts will be made in a
lump sum. During the period of deferral, a director may elect that the
deferred fees be credited with interest at the prime rate in effect as of
each calendar quarter at The Chase Manhattan Bank of New York or be
converted into common stock equivalent units. If stock equivalent units
are elected, the director's account is also credited with stock equivalent
units representing the common stock which could, hypothetically, have been
purchased with the hypothetical cash dividends which would have been paid
on the accumulated stock equivalent units had they been actual common
stock. Upon distribution, stock equivalent units are converted to cash
based upon the fair market value of the common stock at the time of
distribution. During 2000, Messrs. Alexander, Baker, Howatt, Jacobus, and
Freels participated in the plan and deferred all or a portion of the
retainer or meeting fees otherwise payable to them.
Our retirement policy for directors provides for the payment of
retirement benefits for directors who have served on the Board for at
least five years prior to their termination of service. A retired
director's monthly benefit is equal to the monthly retainer and meeting
fees in effect at his termination of service and is paid for a period of
time equal to the retired director's period of service on the Board,
including service on the board of directors of Mosinee Paper Corporation
prior to December 17, 1997. Retirement benefits terminate at death and
are accelerated in the event of a change of control of the company, as
defined in the policy.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth, based on statements filed with the SEC
or information otherwise known to us, the name of each person believed by
us to own more than 5% of our common stock and the number of shares of
common stock held by each person.
Common Shares Percent of
NAME AND ADDRESS BENEFICIALLY OWNED CLASS
Wilmington Trust Company 9,937,785{(1)} 19.34%
Rodney Square North
1100 N. Market Street
Wilmington, DE 19890-0001
Trustees of David B. Smith Family Trust 3,159,537{(2)} 6.15%
1206 E. Sixth Street
Merrill, WI 54452
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The following table sets forth the number of shares of common stock
beneficially owned as of the record date, by each of the directors, each
person nominated to become a director, each of the executive officers
named in the summary compensation table and all directors and executive
officers as a group.
COMMON STOCK PERCENT OF
NAME BENEFICIALLY OWNED CLASS
Walter Alexander 16,212 *
Harry R. Baker 13,240 *
Gary W. Freels 980,085{(3)} 1.91%
Thomas J. Howatt 141,485{(4)} *
Richard G. Jacobus 15,398 *
Dennis J. Kuester 0{(5)} *
San W. Orr, Jr. 1,075,820{(6)} 2.09%
Richard L. Radt 33,546{(4)} *
David B. Smith, Jr. 2,402,491{(7)} 4.67%
Gary P. Peterson 104,514{(4)} *
Stuart R. Carlson 104,777{(4)} *
David L. Canavera 165,014{(4)} *
Dennis M. Urbanek 123,369{(4)} *
All directors and executive officers
as a group (16 persons) 5,175,951 10.07%
<FN>
*Less than 1%
{(1)}Held in a fiduciary capacity as trustee, including 9,899,485
shares held for the benefit of the descendants of A.P. Woodson
and family.
{(2)}David B. Smith, Jr., Thomas P. Smith, Margaret S. Mumma and Sarah S.
Miller are the co-trustees of the David B. Smith Family Trust
(the "Trust") which owns 2,368,372 shares of common stock. Including
common stock which is beneficially owned by the trustees on an individual
basis and common stock owned by the Trust, each of the trustees has sole
or shared investment authority with respect to the following percentages
of common stock: David B. Smith, Jr., 4.77%; Thomas P. Smith, 4.78%;
Margaret S. Mumma, 5.33%; and Sarah S. Miller, 5.20%.
{(3)}Includes 975,065 shares of common stock held by two charitable
foundations of which Mr. Freels serves as president and/or a director.
{(4)}Includes shares which may be acquired through the exercise of
options on or before 60 days.
{(5)}The Marshall & Ilsley Trust Company is trustee of the company's
retirement plans and holder of record of 3,804,670 shares of common
stock as such trustee and in its various other fiduciary capacities.
Included in this total are the shares held by the Trust Company as
custodian of the David B. Smith Family Trust described in note (2).
Mr. Kuester is the President and a director of Marshall & Ilsley
Corporation, the parent corporation of the Trust Company. Mr. Kuester
and the Trust Company each disclaim any beneficial interest in the
shares held of record by the Trust Company.
{(6)}Includes 681,011 shares as to which Mr. Orr exercises shared voting
and investment power (and as to which beneficial ownership is
disclaimed) and shares which may be acquired through the exercise of
options on or before 60 days.
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{(7)}David B. Smith, Jr. is a co-trustee of the David B. Smith Family
Trust which holds 2,368,372 shares of common stock. See note (2).
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires directors and officers and persons who own more than 10%
of the common stock outstanding ("reporting persons") to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission. Reporting persons are also required by SEC regulations to
furnish us with copies of all Section 16(a) forms filed by them with the
SEC. We review copies of the Section 16(a) forms received by us or rely
upon written representations from certain of these reporting persons to
determine compliance with the Section 16(a) regulations for purposes of
this proxy statement. The sale of stock by David B. Smith, Jr. which is
described under "Certain Relationships and Related Transactions" was
inadvertently not reported until February 16, 2001. In addition, the
Form 3 filed by Albert K. Davis upon his appointment as Senior
Vice President, Specialty Paper Group, inadvertently omitted to report the
beneficial ownership of 141 shares.
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The table below sets forth compensation earned by, or awarded or paid
by us to, the CEO as of December 31, 2000, to each person who served as
CEO during the last fiscal year and to each of our four most highly
compensated executive officers as of December 31, 2000, whose salary and
bonus exceeded $100,000 for the last fiscal year.
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SUMMARY COMPENSATION TABLE
Annual Compensation Long Term
Compensation
Awards
Other Annual Options/ All Other
Name and Principal Position Year Salary(1) Bonus Compensation SARs(#) Compensation
San W. Orr, Jr.; Chairman of 2000 $ 250,000 $ 0 0 115,000* $ 35,100{(2)}
the Board+ 1999 $ 100,000 $ 0 0 0 $ 64,641
1998 $ 100,000 $ 0 0 0 $ 69,920
Thomas J. Howatt; President 2000 $ 335,345 $ 71,413 0 382,500* $ 18,570{(3)}
and CEO 1999 $ 247,841 $ 61,631 0 86,205* $ 3,360
1998 $ 231,377 $ 104,506 0 86,205<dagger> $ 6,816
Stuart R. Carlson, Executive 2000 $ 261,593 $ 36,715 0 42,500* $ 3,570{(4)}
Vice President, 1999 $ 247,126 $ 36,963 0 29,600<dagger> $ 3,360
Administration 1998 $ 230,607 $ 121,073 0 29,600<dagger> $ 6,816
Gary P. Peterson, Senior Vice 2000 $ 236,000 $ 51,920 0 17,500* $ 3,570{(4)}
President, Finance, Secretary 1999 $ 228,303 $ 57,083 0 29,600* $ 3,360
and Treasurer 1998 $ 215,496 $ 99,413 0 29,600<dagger> $ 6,816
David L. Canavera, Senior Vice 2000 $ 212,000 $ 100,287 0 17,500* $ 3,570{(4)}
President, Towel & Tissue 1999 $ 204,643 $ 83,011 0 31,840* $ 3,360
Group 1998 $ 195,000 $ 0 0 31,840<dagger> $ 6,816
Dennis M. Urbanek, Senior Vice 2000 $ 215,000 $ 49,450 0 42,500* $ 3,570{(4)}
President, Engineering and 1999 $ 205,379 $ 51,355 0 28,520* $ 3,360
Environmental Services 1998 $ 176,142 $ 62,966 0 50,000<dagger> $ 6,816
Daniel R. Olvey; President 2000 $ 125,231 $ 0 0 0 $2,191,898{(5)}
and CEO+ 1999 $ 462,507 $ 0 0 58,000* $ 34,360
1998 $ 402,277 $ 113,346 0 58,000<dagger> $ 39,816
<FN>
+Mr. Olvey resigned as President and CEO effective February 24, 2000; Mr.
Orr served as interim CEO from February 24, 2000 to August 7, 2000.
*Options to acquire common stock.
<dagger>Stock appreciation rights.
{(1)}Includes compensation deferred by officers under 401(k) plan and by
other agreement.
{(2)}Directors' fees of $33,000 and 401(k) contribution of $2,100.
{(3)}Director's fees of $15,000 and 401(k) contributions of $3,570.
Mr. Howatt's fees were deferred under the Deferred Compensation Plan for
Directors described under the caption "Committees and Compensation of the
Board of Directors."
{(4)}Contributions under 401(k) plan.
{(5)}Includes 401(k) contribution of $3,570 and directors' fees of
$5,000. Mr. Olvey's fees were deferred under the Deferred Compensation Plan
for Directors. Also includes $2,183,328 paid in connection with Mr. Olvey's
resignation.
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STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
GRANTS. We maintain stock appreciation rights ("SAR") and stock
option plans pursuant to which grants may be made to key employees. The
following grants were made in 2000 to executive officers named in the
summary compensation table.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Alternative
INDIVIDUAL Grant Date
GRANTS Value
% of total Market
Options/SARs Price of
Granted to Exercise or Stock on Grant Date
Options/SARs Employees in Base Price Date of Expiration Present
Name Granted(#) Fiscal Year ($Sh) Grant Date Value $(1)
Mr. Orr 115,000{(2) 10.46% $8.97 $8.97 8/7/20 $ 366,850
Mr. Howatt 365,000(2) 33.21% $8.97 $8.97 8/7/20 $ 1,164,350
15,000(3) 1.36% $9.75 $9.75 12/18/20 $ 55,950
2,500(4) 0.23% $9.72 $9.72 6/22/20 $ 8,975
Mr. Peterson 15,000(3) 1.36% $9.75 $9.75 12/18/20 $ 55,950
2,500(4) 0.23% $9.72 $9.72 6/22/20 $ 8,975
Mr. Carlson 25,000(2) 2.27% $9.31 $9.31 10/10/20 $ 84,250
15,000(3) 1.36% $9.75 $9.75 12/18/20 $ 55,950
2,500(4) 0.23% $9.72 $9.72 6/22/20 $ 8,975
Mr. Canavera 15,000(3) 1.36% $9.75 $9.75 12/18/20 $ 55,950
2,500(4) 0.23% $9.72 $9.72 6/22/20 $ 8,975
Mr. Urbanek 25,000(2) 2.27% $9.31 $9.31 10/10/20 $ 84,250
15,000(3) 1.36% $9.75 $9.75 12/18/20 $ 55,950
2,500(4) 0.23% $9.72 $9.72 6/22/20 $ 8,975
<FN>
*All grants in 2000 were stock options.
(1)Determined pursuant to Black-Scholes option pricing model. The
material assumptions and adjustments incorporated into the Black-Scholes model
in estimating the value of the options reflected in the above table include
(a) an option term of 20 years; (b) an interest rate that represents the
interest rate on long-term U.S. Treasury securities with maturity date
corresponding to the term on the grant date; (c) volatility calculated using
daily stock prices for the 36-month period prior to the grant date; (d)
dividends representing the annualized dividend paid with respect to the
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underlying common stock; and (e) reductions to reflect the probability of a
shortened term due to termination of employment prior to the option expiration
date. The particular assumptions used for each grant date are:
GRANT INTEREST ANNUAL DIVIDEND REDUCTION FOR
DATE RATE VOLATILITY DIVIDENDS YIELD SHORTENED TERM
06/22/2000 6.10% 44.6% $0.32 3.29% 13.5%
08/07/2000 5.83% 45.7% $0.33 3.68% 12.2%
10/10/2000 5.74% 46.5% $0.33 3.54% 12.8%
12/18/2000 6.03% 48.1% $0.33 3.38% 13.0%
<FN>
The actual value, if any, a grantee will realize upon exercise of an
option will depend on the excess of the market value of the common stock over
the exercise price on the date the option is exercised. See "Committees'
Report on Compensation--Stock Based Compensation."
(2)Granted under 2000 Stock Option Plan. See "Proposal No. 2 - Approval
of 2000 Stock Option Plan."
(3)Subject to satisfaction of financial performance condition by the
company for fiscal 2001. See also note (2).
(4)Exercise subject to financial performance conditions by the company in
2000 which were not satisfied; options have therefore lapsed.
EXERCISE AND YEAR-END VALUE. The following table sets forth information
regarding the exercise of stock options or SARs in 2000 by each of the
executive officers named in the summary compensation table and the December
31, 2000 value of unexercised, in-the-money stock options or SARs held by each
such person.
-14-
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES
Shares Value Number of Unexercised Value of Unexercised In-the-
Acquired on Realized Options/SARs at FY-End(#) Money Options/SARs at FY-
Name Exercise (#) ($) End ($)
Exercisable Unexercisable Exercisable Unexercisable
Mr. Orr 0 0 91,668* 115,000* $123,655*(1) $183,138*
107,800<dagger> 0 $949,741<dagger> $ 0
Mr. Howatt 0 0 127,817* 382,500* $ 33,913*(1) $595,556*
22,183<dagger> 0 $182,054<dagger> $ 0
Mr. Peterson 0 0 103,800* 17,500* $ 63,424* $ 14,294*
46,200<dagger> 0 $129,342<dagger> $ 0
Mr. Carlson 0 0 103,800* 42,500* $ 63,424* $ 45,606*
46,200<dagger> 0 $132,700<dagger> $ 0
Mr. Canavera 0 0 119,200* 17,500* $ 35,525* $ 14,294*
30,800<dagger> 0 $ 86,679<dagger> $ 0
Mr. Urbanek 0 0 106,520* 42,500* $ 23,044* $ 45,606*
18,480<dagger> 0 $ 47,381<dagger> $ 0
Mr. Olvey 10,000 18,150 286,000* 0 $165,811* $ 0
<FN>
*Options.
<dagger>SARs exercisable only for cash. In cases of SAR valuations,
includes, in cases where the grant so provides, the value of hypothetical
shares credited to grantee under provision in SAR grant which assumes cash
dividends are paid on underlying shares and invested in hypothetical common
stock.
(1) Value of options with respect to 91,668 shares (Mr. Orr) and 32,444
shares (Mr. Howatt) include the value of hypothetical shares credited under
the Dividend Equivalent Plan which assumes cash dividends are paid on
underlying shares and invested in hypothetical common stock.
RETIREMENT BENEFITS
Effective January 1, 1999, our retirement plan for non-union employees was
converted to a "cash balance" plan. The plan bases a participant's pension on
the value of a hypothetical account balance in the plan. Participants in the
plan as of December 31, 1998, received a starting cash balance account in an
amount equal to the present value of their benefit under the former retirement
plan formula which was based on years of credited service and final average
compensation, with an offset to reflect our contribution to Social Security.
In addition, non-union participants as of December 31, 1998 received a special
one-time transition credit in an amount equal to a specified percentage
varying with age, multiplied by credited service and 1998 covered
compensation. A participant will receive an annual credit to his account
equal to 4.25% of covered compensation up to the Social Security taxable wage
base and 8.5% of the covered compensation in excess of the taxable wage base,
plus an interest credit on all prior accruals equal to the discount rate on
12-month U.S. Treasury bills as in effect in November of the year preceding
-15-
the plan year. The benefit payable under the plan is determined by converting
the hypothetical account balance credits into annuity form. Individuals who
were participants in the plan on December 31, 1998 and who retire on or before
December 31, 2003 will receive a minimum benefit equal to the benefit they
would have received under the plan formula as in effect on December 31, 1998.
Executive officers, other than Mr. Orr, also participate in a nonqualified
supplemental retirement plan under which benefits are determined by
compensation without regard to limitations contained in the cash balance plan.
The supplemental and cash balance plan will provide an executive officer with
a retirement benefit equal to 50% of his average salary and bonus upon
retirement at age 62 after 10 years of service as an executive officer. The
supplemental plan provides for an offset of benefits payable under the cash
balance plan. Accrued benefits under the supplemental plan will be paid in a
lump sum in the event of a change of control of the company, as defined in the
supplemental plan.
Based on average covered compensation as of December 31, 2000, the
following estimated single life annual benefits would be payable from the cash
balance and supplemental retirement plans upon retirement at age 65 to the
following executive officers:
ADDITIONAL TOTAL AVERAGE
YEARS OF QUALIFIED SUPPLEMENTAL RETIREMENT COVERED
EXECUTIVE OFFICER SERVICE(1) PLAN BENEFIT PLAN BENEFIT BENEFIT REMUNERATION
Mr. Orr 23 $34,000 $ 0 $ 34,000 $100,000
Mr. Howatt 8 $66,000 $108,000 $174,000 $348,000
Mr. Peterson 9 $27,000 $130,000 $157,000 $313,000
Mr. Carlson 9 $26,000 $132,000 $158,000 $315,000
Mr. Canavera 9 $28,000 $109,000 $137,000 $275,000
Mr. Urbanek 10 $44,000 $ 76,000 $120,000 $239,000
<FN>
(1)Years of service as an executive officer under the supplemental plan,
except for Mr. Orr, who does not participate in the plan. Vesting under the
supplemental plan with respect to the listed officers requires attainment of
age 55 and 10 years of service as an executive officer. All officers are
vested in their accrued benefit under the cash balance plan.
Mr. Orr participates in plans which will provide, beginning at age 60 (or
upon Mr. Orr's later termination of employment), an annual retirement benefit
of 50% of covered compensation. Mr. Orr's covered compensation under this
plan at December 31, 2000 was $100,000 and his accrued annual normal
retirement benefit was $50,000. The plans provide for payment of the present
value of the benefit in a lump sum in the event of a change of control of the
company, as defined in the agreement.
COMMITTEES' REPORT ON COMPENSATION POLICIES
The Executive Compensation & Bonus Committee establishes and reviews base
salaries of executive officers and is responsible for the establishment and
implementation of executive bonus and incentive programs and general
compensation policies. The compensation program for executive officers may
include various grants under stock option, SAR and dividend equivalent plans.
The plans are administered by the Board's Option and SAR Committee which
-16-
generally considers recommendations of the Compensation Committee with respect
to grants, but has full discretion and control over whether a grant will be
made and the amount and terms of any such grant. Insofar as this report
includes a description of the compensation policies relating to the stock
option, SAR and dividend equivalent plans, this report is a joint report of
the Compensation Committee and the Option and SAR Committee. Executive
officers who served on the Compensation Committee do not participate in the
Committee's determination of their own compensation.
This report describes the policies of the committees and the company as in
effect for the 2000 fiscal year. As circumstances change and one or more of
the committees deem it appropriate, policies in effect from time to time for
years after 2000 may change.
GENERAL
The compensation policy is designed so that a significant portion of each
executive officer's compensation package is directly related to the annual
performance of the company and the performance of the company's common stock.
The policy is designed to attract and retain individuals who have experience
in the paper industry or who otherwise have particular training or skills
which will satisfy particular requirements of the company. This policy is
also intended to reward job performance which the Compensation Committee
believes to be at or above the level expected of the company's executive
officers. The total compensation paid to executive officers and the
retirement and other fringe benefits provided by the company are designed to
offer a level of compensation which is competitive with other companies in the
paper industry. Some, but not all, of the companies used for purposes of
compensation comparisons are included in the 51 companies which, in addition
to the company, comprise the Media General index of paper companies' stock
performance under the heading "Stock Price Performance Graph." The
Compensation Committee makes compensation comparisons only with those
companies whose operations are similar to the company or which have operating
units which are similar to the company. Given the disparity in size between
companies which operate in the paper industry and the difficulty in
determining the precise duties of executive officers of other companies, it is
difficult to draw exact comparisons with the compensation policies of other
companies. The determination of executive compensation is, therefore,
subjective.
The company may not deduct as a business expense compensation paid to the
CEO and each of the four most highly paid executive officers named in the
summary compensation table who are officers on the last day of the year to the
extent the compensation paid to the individual officer exceeds $1 million
annually. This limitation is subject to certain exceptions for compensation
paid pursuant to performance-based plans and amounts received through the
exercise of stock options and SARs, provided certain requirements are met. No
compensation paid in 2000 exceeded the deductible limit. The Compensation
Committee intends that compensation paid to executives will qualify for this
deduction and it will continue to review this limit and its application to the
company's compensation policies.
BASE COMPENSATION
The Compensation Committee does not rely on specific salary and benefit
comparisons, but does periodically consider and review a general survey of
paper industry compensation prepared by an independent compensation and
benefit consultant in order to gauge the relationship of its executive
-17-
officers' base salary and benefit levels to the levels of comparable operating
units of larger paper companies. Annual increases in the base salary of each
of the company's executive officers are determined in accordance with the
Compensation Committee's policy of maintaining competitive salary levels with
other paper industry companies (as discussed above), more general factors such
as the rate of inflation, and individual job performance. Individual job
performance in the prior fiscal year is the most important factor considered
by the Compensation Committee in annual reviews and in determining appropriate
increases in base salary. The CEO annually assesses the job performance of
executive officers who report to him. The CEO's base salary is determined by
the Compensation Committee on the same basis as that of the company's other
executive officers, except that the Compensation Committee annually
establishes performance criteria for the CEO and reviews his performance.
During 2000, Mr. Orr was paid $150,000 for services as interim CEO.
INCENTIVE COMPENSATION BASED ON FINANCIAL PERFORMANCE OF THE COMPANY AND
INDIVIDUAL PERFORMANCE
The company maintains incentive reward plans for executive officers which
provide for the payment of annual cash bonuses to participants if the
company's annual financial and/or individual performance objectives are met.
The criteria by which incentive awards are determined are based on the
Compensation Committee's assessment of the total cash compensation available
to executive officers as base salary and under the incentive plans and are
designed to provide total annual cash compensation which is comparable to
amounts paid to officers in comparable positions in the paper industry. The
Compensation Committee can modify performance objectives during a fiscal year
under any of the plans if an unusual or nonrecurring event occurs which would
have a significant effect on the stated performance goals.
Mr. Howatt, who served as Senior Vice President, Printing & Writing Group
until August 7, 2000, and Mr. Canavera participated in plans which provided
for incentive compensation ranging from 20% of base salary to 75% of base
salary, depending upon achievement of their respective operating group's
targeted operating profit. Each officer also had the opportunity to earn
incentive compensation equal to 25% of base salary upon satisfaction of
individual performance objectives established by the CEO at the beginning of
the year.
Mr. Carlson served as Senior Vice President, Specialty Paper Group until
October 10, 2000 when he was appointed to the position of Executive Vice
President, Administration. Mr. Carlson participated in a plan which provided
for incentive compensation ranging from 0% of base salary to 75% of base
salary, depending upon achievement of his operating group's targeted operating
profit. He also had the opportunity to earn incentive compensation equal to
25% of base salary upon satisfaction of individual performance objectives
established by the CEO.
Mr. Peterson and Mr. Urbanek participated in a plan which provided for a
bonus equal to 20% of base salary if 2000 earnings per share were at $0.92 to
75% of base salary if 2000 earnings per share were at least $1.38. They also
participated in a plan which provided for a maximum bonus of 25% of base
-18-
salary upon satisfaction of individual performance objectives established at
the beginning of the year by the CEO.
In all cases, earnings per share were adjusted for accruals on SARs, bonus
expense, the effect of purchases of company stock under the stock repurchase
program, and extraordinary items.
STOCK BASED COMPENSATION
Executive officers participate in stock option, SAR and dividend
equivalent plans at various levels. The Option and SAR Committee may impose
restrictions as to exercise or vesting of grants. The Option and SAR
Committee has not established formal criteria by which the size of plan grants
are determined, but the committee considers the amount and terms of each grant
already held by an executive officer in determining the size and terms of any
new grant. The value of these grants are principally related to the long-term
performance of the common stock and, therefore, provide an identity of
interests between executive officers and the shareholders.
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Orr is Chairman of the Board and served on the Compensation Committee
in 2000. None of the members of the Option and SAR Committee is an officer of
the company.
MEMBER OF
MEMBER OF EXECUTIVE COMPENSATION
OPTION AND SAR COMMITTEE & BONUS COMMITTEE
Walter Alexander San W. Orr, Jr.
Harry R. Baker Harry R. Baker
Gary W. Freels Richard G. Jacobus
David B. Smith, Jr. David B. Smith, Jr.
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
During 2000, we engaged in various business transactions with companies
for which some of our directors serve as directors or officers. Each of these
transactions was done in the ordinary course of business and at prices and on
terms prevailing at the time for comparable transactions with unrelated
persons. These transactions included banking and trust services provided by
Marshall & Ilsley Corporation, of which Mr. Kuester, a nominee for election to
our Board, serves as president and a board member. We believe that none of
the transactions were material to us or the other companies involved. We
expect that similar transactions in the ordinary course of our business will
continue in the future.
During fiscal 2000, we purchased 50,000 shares of common stock from
David B. Smith, Jr. in a private transaction at $7.75 per share, the average
market price on the day of the transaction. Pursuant to our relocation
policy, we purchased the home of John J. Schievelbein in connection with his
appointment as Senior Vice President, Printing & Writing Group and relocation
to assume his new duties. The purchase price of $207,000 was determined by
independent appraisals as the fair market value of the home.
-19-
STOCK PRICE PERFORMANCE GRAPH
The following graph and table compare the yearly percentage change in the
cumulative total shareholder return on our common stock for the period
beginning December 31, 1990 and ending December 31, 2000 with the Media
General Financial Services' Russell 2000 and Paper and Paper Products Indices
for the same periods. The graph and table assume that the value of the
investment in our common stock and each index on December 31, 1995 was $100
and that all dividends were reinvested.
[Stock Price Performance Graph deleted pursuant to Rule 304(d) of
Regulation S-T. Data reported in the graph is also reported in the
following tabular form in the proxy statement delivered to
shareholders.]
December 31
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Wausau-Mosinee
Paper Corporation 29.69 70.98 73.42 97.46 75.09 100.00 85.81 94.49 84.28 56.96 51.08
MG Paper & Paper
Products 52.06 65.51 68.93 72.02 80.47 100.00 114.87 122.00 122.14 151.61 137.68
Russell 2000 Index 38.56 56.32 66.69 79.30 77.86 100.00 116.61 142.66 138.66 165.82 158.66
-20-
PROPOSAL NO. 2 - APPROVAL OF 2000 STOCK OPTION PLAN
THE FOLLOWING SUMMARY OF THE MATERIAL FEATURES OF THE 2000 STOCK OPTION
PLAN (THE "2000 PLAN") DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED BY
REFERENCE TO THE TEXT OF THE PLAN. A COPY OF THE PLAN IS AVAILABLE UPON
REQUEST FROM THE SECRETARY OF THE COMPANY. THE PLAN WILL ALSO BE FILED AS AN
EXHIBIT TO OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
2000, AND WILL BE AVAILABLE AT THE SEC'S WEB SITE, HTTP://WWW.SEC.GOV, UPON
FILING OF THAT REPORT.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 2000 PLAN.
ADOPTION AND PURPOSE
On June 22, 2000, the Board adopted the 2000 Plan, subject to the approval
of the shareholders at the annual meeting. The purpose of the 2000 Plan is to
enable us to attract and retain management-level employees and directors and
to link stock-based individual participant incentives directly to our
financial performance and increase shareholder value.
ADMINISTRATION
The 2000 Plan is administered by the Board's Option and SAR Committee.
The Option Committee consists of not less than three members of the Board who
may not be employees of the company and who must satisfy other conditions
prescribed for "non-employee directors" under SEC Rule 16b-3 and "outside
directors" under Section 162(m) of the Internal Revenue Code (the "Code").
Messrs. Baker, Alexander, Freels and Smith serve on the Option Committee.
The Option Committee is authorized, in its sole discretion, to select
those eligible employees who will receive stock option awards, determine the
number of shares covered by such awards, impose conditions on the vesting or
exercise of options, and administer and interpret the plan.
PERSONS ELIGIBLE TO RECEIVE OPTIONS
Salaried employees of the company or its subsidiaries who function in
management, administrative or professional capacities, prospective salaried
employees who will function in one of those capacities and who have accepted
offers of employment and our directors are eligible to participate in the
Plan. Membership in the eligible class of persons does not provide a right to
participate in the 2000 Plan. Options will be granted only to those eligible
persons who are selected by the Option Committee. As of the date of this
proxy statement, we estimate that the number of eligible persons is
approximately 40.
NEW PLAN BENEFITS
During the last fiscal year, options were granted to the executive
officers named in the table captioned "Option/SAR Grants in Last Fiscal Year,"
page 13. Stock options were granted during the last fiscal year to the
following groups:
-21-
NO. OF AVERAGE WEIGHTED
GROUP SHARES EXERCISE PRICE
Executive Officers as a group 801,013(1)(2) $9.16
Non-Executive Directors as a group 75,000(3) $8.97
Non-Executive Officers as a group 32,500 $9.49
Nominees for Director as a group 30,000(2)(3) $8.97
Employee Group (other than
Executive Officers) 137,500 $9.69
<FN>
(1)See "Option/SAR Grants in Last Fiscal Year," page 13.
(2)Includes the grant of options with respect to 15,000 shares to Mr. Radt.
(3)Includes the grant of options with respect to 15,000 shares to Mr. Baker.
All options granted are subject to shareholder approval of the plan.
OPTIONS
GENERAL. Options awarded to employees under the 2000 Plan may be either
incentive stock options ("ISOs") under Internal Revenue Code Section 422 or
options which do not satisfy the requirements of the Code for ISOs ("non-
qualified options").
SHARES TO BE AWARDED. The number of shares which may be awarded under an
ISO in any year is limited to that number which, when the option first becomes
exercisable, will have a value which is not in excess of $100,000. No
employee may be awarded options with respect to more than 500,000 shares
(subject to adjustment for future stock splits, stock dividends or other
similar increases in the number of shares outstanding) in any calendar year.
EXERCISE PRICE. All options must be awarded at an option price which is
not less than the fair market value of the common stock on the date the option
is awarded. For purposes of the plan, the "fair market value" of a share of
common stock generally means the average of the highest and lowest sales
prices as reported on the New York Stock Exchange Composite Tape.
PAYMENT FOR OPTIONS. No consideration is received by us when an option is
awarded. Upon exercise of an option, we will receive payment for the shares
in cash or, with the consent of the Option Committee, an optionee may elect to
deliver common stock owned by the optionee or to have shares withheld which
have a fair market value equal to the exercise price.
CONDITIONS TO EXERCISE. The Option Committee may establish various
conditions or requirements which must be satisfied before an option becomes
exercisable. These conditions may require the attainment of certain financial
goals by the company, the passage of stated periods of time before the options
vest, or any other conditions the Option Committee believes are reasonably
related to the achievement of the purpose of the 2000 Plan. The Option
Committee may also waive or modify any such conditions in its sole discretion.
-22-
TERM AND EXERCISE PERIODS OF OPTIONS. The Option Committee may establish
the term of any option, although all ISOs must be exercised within ten years
of their date of award and all non-qualified options must be exercised within
twenty years of their date of award. Options must generally be exercised
within three months of the optionee's termination of employment, although
extended exercise periods of up to two years are provided for in the case of
retirement, death or disability. Options are forfeited upon termination for
cause as defined in the plan. Options are not transferrable, except upon the
death of an optionee.
FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the principal federal income tax
consequences associated with the award and exercise of options under the 2000
Plan. This discussion is based on the Code as in effect on the date of this
proxy statement.
INCENTIVE STOCK OPTIONS. An optionee will not generally recognize income
upon the grant of an ISO and will not generally recognize income upon exercise
of the option, provided the optionee is an employee of the company or a
subsidiary at all times from the date of grant until three months prior to
exercise. However, the amount by which the fair market value of the shares on
the date of exercise exceeds the exercise price will be includable for
purposes of determining any alternative minimum taxable income of an optionee.
If an optionee who has exercised an incentive stock option sells the shares
acquired upon exercise more than two years after the grant date and more than
one year after exercise, capital gain or loss will be recognized equal to the
difference between the sales price and the exercise price. An optionee who
sells the shares within two years after the grant date or within one year
after exercise will recognize ordinary compensation income in an amount equal
to the lesser of the difference between (a) the exercise price and the fair
market value of the shares on the date of exercise or (b) the exercise price
and the sales proceeds. Any remaining gain or loss will be treated as a
capital gain or loss. We will be entitled to a federal income tax deduction
equal to the amount of ordinary compensation income recognized by the optionee
in this case. The deduction will be allowable at the same time the optionee
recognizes the income.
NON-QUALIFIED OPTIONS. No income for federal tax purposes is required to
be recognized by an optionee at the time a non-qualified option is awarded.
Upon exercise of a non-qualified option, the optionee will recognize ordinary
income in an amount in excess of the fair market value of the shares on the
date of exercise over the option price. Upon exercise of a non-qualified
option by an optionee, we are entitled to a deduction equal to the amount of
the ordinary income realized by the optionee.
If an optionee sells shares received upon the exercise of such a non-
qualified option, the optionee will recognize capital gain income to the
extent the sales proceeds exceed the fair market value of the shares on the
date of exercise. The capital gains are long-term in nature if the optionee
has held the shares for at least one year and a day prior to selling it.
-23-
SHARES AVAILABLE FOR OPTIONS
As of the record date, approximately 1,046,013 shares were subject to
outstanding options and 77,110 shares were available for award under the 1991
Employee Stock Option Plan (the "1991 Plan"). If the 2000 Plan is approved by
the shareholders, no further options will be awarded under the 1991 Plan, but
shares of common stock which would have been available for options under the
1991 Plan will become available for options to be awarded under the 2000 Plan.
The 2000 Plan also authorizes the issuance of options to purchase 3,000,000
shares of common stock, or approximately 5.8% of the shares outstanding on the
record date. If approved by the shareholders, the shares available for
options under the 2000 Plan, including all shares now available under the 1991
Plan, will represent approximately 6% of the shares outstanding on the record
date. On the record date, the closing price per share of the common stock as
reported on the New York Stock Exchange, was $11.20.
If any option awarded under the 2000 or 1991 Plans terminates without
having been exercised in full, the number of shares as to which such option
was not exercised will remain available for future option awards under the
2000 Plan. Similarly, shares which are not delivered to an optionee because
the optionee elects to have shares withheld to pay the optionee's withholding
tax, or because the optionee has delivered shares owned by the optionee in
payment of the exercise price, will remain available for future option awards.
The number of shares as to which options may be awarded under the 2000
Plan will be adjusted to reflect future stock splits, stock dividends or other
similar increases in the number of shares of common stock outstanding. In
addition, the Option Committee has the authority to make such adjustment as it
deems appropriate if there is any other change in the capital structure of the
company.
CHANGE OF CONTROL
Upon the occurrence of a change of control, each option outstanding on the
date on which the change in control occurs will immediately become exercisable
in full. In the event of an optionee's termination of employment within one
year of a change of control, each option will be exercisable for a period
which is not less than one year from the date of the change of control. Each
optionee will also have the right, at his or her election made during a period
of 60 days following the date on which the change of control occurs, to
surrender all or part of any option for an immediate lump-sum cash payment for
each covered share which is surrendered. This payment will be equal to the
excess, if any, of (1) the higher of (a) the highest fair market value on any
date in the 60-day period ending on the date on which the change of control
occurred, or (b) the highest per share price for common stock actually paid in
connection with the change of control, over (2) the per share exercise price
of the option surrendered. The change of control provisions may be modified
or terminated by the Option Committee in the event such provisions would
render pooling-of-interests accounting unavailable for a merger or other
acquisition transaction.
For purposes of the 2000 Plan, the term "change of control" is defined to
include (1) the acquisition, directly or indirectly, of at least 20% of the
outstanding voting securities of the company; (2) certain mergers and
consolidations which result in our shareholders owning less than 60% of the
-24-
new corporation; (3) the sale or other disposition of all or substantially all
of our assets; (4) a liquidation or dissolution approved by our shareholders;
and (5) a change in the majority of the members of the Board, other than a
change consisting of directors nominated with the approval of the Board.
AMENDMENT AND TERMINATION OF THE 2000 PLAN
The 2000 Plan may be amended by the Board at any time, subject to certain
limitations. Certain amendments, such as an increase in the number of shares
available for options, may also require the approval of shareholders under the
rules of a securities exchange and, to the extent so required, we intend to
seek such approval. The Board may not amend the 2000 Plan in a manner which
would adversely affect the rights of the holder of an option without the
holder's consent.
The 2000 Plan may be terminated at any time by the Board, but termination
of the plan cannot, without the optionee's consent, reduce or restrict the
optionee's rights under any options previously awarded under the plan. Unless
the Board elects to terminate the plan at an earlier date, the 2000 Plan will
terminate on June 21, 2010.
APPLICATION OF SECTION 162(M) OF THE CODE
Compensation of persons who are named in the summary compensation table in
the company's proxy statement is generally subject to the tax deduction limits
of section 162(m) of the Code. Stock options that qualify as "performance-
based compensation" are exempt from section 162(m), thus allowing us the full
tax deduction otherwise permitted for such compensation. If approved by our
shareholders, the 2000 Plan will enable the Option Committee to grant stock
options that will be exempt from the deduction limits of section 162(m).
VOTE REQUIRED FOR APPROVAL OF THE 2000 PLAN
Approval of the 2000 Plan requires the vote of a majority of the common
stock cast at the annual meeting, provided that the total vote cast represents
a majority of the total number of shares entitled to vote at the annual
meeting on the approval of the plan.
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All shareholders are requested to specify their vote on the enclosed form
of proxy. If no specification is made, the proxy will be voted for approval
of the 2000 Plan.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE APPROVAL OF THE
2000 PLAN.
Dated: March 19, 2001.
By order of the Board of Directors
GARY P. PETERSON
GARY P. PETERSON
Secretary
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY.
APPENDIX A
AUDIT COMMITTEE CHARTER
The Audit Committee is appointed by the Board to assist the Board in
monitoring (1) the quality of the financial statements of the company, (2) the
compliance by the company with legal and regulatory requirements and (3) the
independence and performance of the company's internal and external auditors.
The members of the Audit Committee shall meet the independence and
experience requirements of the New York Stock Exchange. The members of the
Audit Committee shall be appointed by the Board on the recommendation of the
Nominating Committee.
The Audit Committee shall have the authority to retain special legal,
accounting or other consultants to advise the Committee. The Audit Committee
may request any officer or employee of the company or the company's outside
counsel or independent auditor to attend a meeting of the Committee or to meet
with any members of, or consultants to, the Committee.
The Audit Committee shall make regular reports to the Board.
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval.
2. Review the annual audited financial statements with management, including
major issues regarding accounting and auditing principles and practices as
well as the adequacy of internal controls that could significantly affect
the company's financial statements.
3. Review an analysis prepared by management and the independent auditor of
significant financial reporting issues and judgements made in connection
with the preparation of the company's financial statements.
4. Review with management and the independent auditor the company's quarterly
financial statements prior to filing of 10-Q.
5. Meet periodically with management to review the company's major financial
risk exposures and the steps management has taken to monitor and control
such exposures.
6. Review material changes to the company's auditing and accounting
principles and practices as suggested by the independent auditor, internal
auditors or management.
7. Recommend to the Board the appointment of the independent auditor, which
firm is ultimately accountable to the Audit Committee and the Board.
8. Approve the fees to be paid to the independent auditor for audit services
and each non-audit service that exceeds 10% of the total auditing fees.
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9. Receive periodic reports from the independent auditor regarding the
auditor's independence, discuss such reports with the auditor, consider
whether the provision of non-audit services is compatible with maintaining
the auditor's independence and, if so determined by the Audit Committee,
recommend that the Board take appropriate action to satisfy itself of the
independence of the auditor.
10. Evaluate together with the Board the performance of the independent
auditor and, if so determined by the Audit Committee, recommend that the
Board replace the independent auditor.
11. Review the appointment and replacement of the senior internal auditing
executive.
12. Review the significant reports to management prepared by the internal
auditing department and management's responses.
13. Meet with the independent auditor prior to the audit to review the
planning and staffing of the audit.
14. Obtain from the independent auditor assurance that Section 10A of the 1934
Securities & Exchange Act has not been implicated.
15. Obtain reports from management, the company's senior internal auditing
executive and the independent auditor that the company's
subsidiary/foreign affiliated entities are in conformity with applicable
legal requirements and the company's Corporate Compliance Manual and Code
of Conduct ("Code of Conduct").
16. Discuss with the independent auditor the matters required to be discussed
by Statement on Auditing Standard No. 61 relating to the conduct of the
audit.
17. Review with the independent auditor any problems or difficulties the
auditor may have encountered and any management letter provided by the
auditor and the company's response to that letter. Such review should
include:
(a) Any difficulties encountered in the course of the audit work,
including any restrictions on the scope of activities or access to
required information.
(b) Any changes required in the planned scope of the internal audit.
(c) The internal audit department responsibilities, budget and staffing.
18. Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the company's annual proxy statement.
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19. Advise the Board with respect to the company's policies and procedures
regarding compliance with applicable laws and regulations and with the
company's Code of Conduct.
20. Review with the company's General Counsel legal matters that may have a
material impact on the financial statements, the company's compliance
policies and any material reports or inquiries received from regulators or
governmental agencies.
21. Meet at least annually with the chief financial officer, the senior
internal auditing executive and the independent auditor in separate
executive sessions.
While the Audit Committee has the responsibilities and powers set forth in
this Chapter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the company's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
auditor. Nor is it the duty of the Audit Committee to conduct investigations,
to resolve disagreements, if any, between management and the independent
auditor or to assure compliance with laws and regulations and the company's
Code of Conduct.
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Appendix I
This document is filed pursuant to Instruction 3 to Item 10 of Schedule
14A and is not part of the proxy solicitation material filed herewith.
WAUSAU-MOSINEE PAPER CORPORATION
2000 STOCK OPTION PLAN
WAUSAU-MOSINEE PAPER CORPORATION
2000 STOCK OPTION PLAN
SECTION 1. PURPOSE. The Plan has been adopted to enable the
Company to attract and retain management-level employees and directors
and to link stock-based individual participant incentives directly to
the Company's financial performance and increases in shareholder value.
SECTION 2. CERTAIN DEFINITIONS. As used in this Plan, and in
addition to any terms elsewhere defined in this Plan, the following
terms, when capitalized, shall have the meanings set forth in this
Section 2.
SECTION 2.1. "BOARD" means the Board of Directors of the Company.
SECTION 2.2. "CAUSE" means, with respect to any Optionee and unless
otherwise provided by the Committee, (a) "Cause" as defined in any
Option Agreement for the benefit of the Optionee, or (b) if there is no
definition of "Cause" in the Optionee's Option Agreement, then with
respect to such Optionee, Cause means: (i) an intentional failure to
perform assigned duties; (ii) willful misconduct in the course of the
Optionee's employment; (iii) breach of a fiduciary duty involving
personal profit or acts or omissions of personal dishonesty, including,
but not limited to, commission of any crime of theft, embezzlement, or
misapplication of funds; (iv) any intentional, reckless, or negligent
act or omission to act which results in the violation by the Optionee
of any policy established by the Company or a Subsidiary which is
intended to insure compliance with applicable securities,
environmental, employment discrimination, or other laws or which
causes or results in the Company's or a Subsidiary's violation of such
laws, except any act done by the Optionee in good faith, as determined
in the reasonable discretion of the Committee, or which results in a
violation of such policies or laws which is, in the reasonable sole
discretion of such Committee, immaterial; or (v) any of the foregoing
which results in material loss to the Company or any of its
Subsidiaries. The Committee shall have the sole discretion to
determine whether Cause exists, and the Committee's determination shall
be final.
SECTION 2.3. "CHANGE IN CONTROL" has the meaning set forth in
Section 8.2.
SECTION 2.4. "CODE" means the Internal Revenue Code of 1986, as
amended. The reference to any specific section of the Code or any
regulation promulgated thereunder shall include any successor section
or sections or regulation or regulations, as the case may be.
SECTION 2.5. "COMMITTEE" means, subject to the provisions of
Section 4, the Option and SAR Committee of the Board.
SECTION 2.6. "COMMON STOCK" means the common stock, no par value,
of the Company.
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SECTION 2.7. "COMPANY" means Wausau-Mosinee Paper Corporation, a
Wisconsin corporation.
SECTION 2.8. "DIRECTOR" means a member of the Board, and includes
all such members who are also employees of the Company.
SECTION 2.9. "DISABILITY" means (a) a physical or mental condition
which qualifies as a total and permanent disability under the terms of
any plan or policy maintained by the Company or a Subsidiary and for
which the Optionee is eligible to receive benefits under such plan or
policy, or (b) if the Optionee does not participate in a disability
plan or is not covered by a disability policy of the Company or a
Subsidiary, Disability means the permanent and total inability of the
Optionee by reason of mental or physical infirmity, or both, to perform
the work customarily assigned to him or her, if a medical doctor
selected or approved by the Committee, and knowledgeable in the field
of such infirmity, advises the Committee either that it is not possible
to determine when such Disability will terminate or that it appears
probable that such Disability will be permanent during the remainder of
said Optionee's lifetime.
SECTION 2.10. "EFFECTIVE DATE" means June 22, 2000.
SECTION 2.11. "EMPLOYED," and any variation thereof such as
"EMPLOYMENT," means, as appropriate, employed by or employment with any
of the Company or any present or future Subsidiary.
SECTION 2.12. "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended. The reference to any specific section of the
Exchange Act or any regulation promulgated thereunder shall include any
successor section or sections or regulation or regulations, as the case
may be.
SECTION 2.13. "FAIR MARKET VALUE" of a share of Common Stock as of
any date means the price per Share as determined in accordance with the
following:
(A) EXCHANGE. If the principal market for the Common Stock
is a national securities exchange, "Fair Market Value" means the
average of the highest and lowest reported sale prices of the Common
Stock on the New York Stock Exchange Composite Tape if the Common Stock
is then listed for trading on such exchange, otherwise, the average of
the highest and lowest reported sales prices of the Common Stock in any
transaction reported on the principal exchange on which the Common
Stock is then listed for trading.
(B) OVER-THE-COUNTER. If the principal market for the Common
Stock is an over-the-counter market, "Fair Market Value" means the
average of the highest bid and lowest ask prices of the Common Stock
reported in the Nasdaq National Stock Market, or if the Common Stock is
not then listed for trading in such market, the average of the highest
bid and lowest ask prices reported on any other bona fide
over-the-counter stock market selected in good faith by the Committee.
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(C) DATE. If the date on which Fair Market Value is to be
determined is not a business day, or, if there shall be no reported
transactions for such date, such determination shall be made on the
next preceding business day for which transactions were reported.
(D) OTHER DETERMINATION. If subparagraphs (a) and (b) are
not applicable, Fair Market Value shall mean such amount as may be
determined by the Committee by whatever means or method as the
Committee, in the good faith exercise of its discretion, shall at
such time deem appropriate.
SECTION 2.14. "INCENTIVE STOCK OPTION" means an Option granted
pursuant to the terms of the Plan which is intended by the Committee to
meet the requirements of an "incentive stock option" within the meaning
of Section 422 of the Code; provided, however, that to the extent an
Incentive Stock Option is exercised after the expiration of any
limitation on the time of exercise applicable under Section 422 of the
Code, or such Option does not meet the qualifications of an "incentive
stock option" within the meaning of such Section 422, such Option shall
thereafter be a Non-Qualified Option.
SECTION 2.15. "NON-QUALIFIED OPTION" means (a) an Option granted
pursuant to the terms of the Plan which the Committee intends shall not
meet the requirements of an "incentive stock option" within the meaning
of Section 422 of the Code, and (b) any Option intended to be an
Incentive Stock Option which does not satisfy the terms, or is not
exercised in accordance with the requirements of, Section 422 of the
Code.
SECTION 2.16. "OPTION" means an option to purchase Shares awarded
pursuant to the provisions of Section 6.
SECTION 2.17. "OPTION AGREEMENT" means the written document which
evidences an award of Options, whether or not such document requires
the signature of the Optionee.
SECTION 2.18. "OPTIONEE" means an eligible individual, as
determined in accordance with Section 5, who has been granted an
Option.
SECTION 2.19. "OPTION PRICE" means, with respect to each Option,
the price per Share at which such Option may be exercised and the
Shares subject to such Option purchased.
SECTION 2.20. "PLAN" means the Wausau-Mosinee Paper Corporation
2000 Stock Option Plan as set forth herein or as hereafter amended.
SECTION 2.21. "RETIREMENT" means, with respect to an Optionee who
is Employed, the Termination of Service by the Optionee on or after the
date on which the Optionee had attained age fifty-five and completed
ten calendar years of service with the Company, including service with
any Subsidiary, and, with respect to a Director who is not Employed,
the Termination of Service by the Director on or after the completion
of not less than five calendar years of service as a Director.
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SECTION 2.22. "SHARE" means a share of Common Stock.
SECTION 2.23. "SUBSIDIARY" means any corporation, partnership, or
other entity in which the Company owns, directly or indirectly, at
least a 50% interest in the voting rights or profits.
SECTION 2.24. "TERMINATION OF SERVICE" means, (a) with respect to
an Employed Optionee, the Optionee's termination of Employment, and (b)
with respect to a Director who is not Employed, the termination of such
Optionee's service as a Director. An Optionee Employed by a Subsidiary
shall also be deemed to incur a Termination of Service if the
Subsidiary ceases to be such a Subsidiary and the Optionee does not
immediately thereafter become an employee of the Company or another
Subsidiary. Temporary absences from Employment because of illness,
vacation, or leave of absence and transfers among the Company and its
Subsidiaries shall not be considered Terminations of Service. For
purposes of the Plan, the Optionee's Termination of Service shall be
deemed to have occurred at the close of business on the day preceding
the first date on which he or she is no longer for any reason
whatsoever Employed, or, in the case of a Director, the first date on
which he or she is no longer a Director.
SECTION 3. NUMBER OF SHARES AVAILABLE FOR OPTIONS.
SECTION 3.1. SHARES SUBJECT. The aggregate number of Shares which
may be delivered under Options awarded pursuant to the Plan shall be
equal to the sum of (a) 3,000,000 and (b) any Shares available for
future awards under all prior stock option plans of the Company (the
"Prior Plans") as of the Effective Date, including any Shares with
respect to which options awarded under any Prior Plans are hereafter
forfeited, expire, or are canceled without delivery of Shares.
SECTION 3.2. UNDELIVERED SHARES. To the extent any Shares subject
to an Option are not delivered to the Optionee (or the estate or other
transferee of such Optionee) because the Option is forfeited, expires,
or otherwise becomes unexercisable, or the Shares are not delivered
because the Shares are used to satisfy the applicable tax withholding
obligation of the Optionee, such Shares shall be deemed not to have
been delivered for purposes of determining the maximum number of Shares
available for delivery under the Plan.
SECTION 3.3. EXERCISE USING SHARES. If the Option Price of any
Option awarded under the Plan or any Prior Plan is satisfied by
tendering Shares to the Company (by actual delivery or attestation),
only the number of Shares issued to the Optionee (or the estate or
other transferee of such Optionee), net of the Shares tendered, shall
be deemed delivered for purposes of determining the maximum number of
Shares available for delivery under the Plan.
SECTION 3.4. STOCK DIVIDENDS, ETC. If the Company shall, after
the Effective Date, change the Common Stock into a greater or lesser
number of Shares through a stock dividend, stock split-up, or
combination of Shares, then (a) the number of Shares then subject to
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the Plan, but which are not then subject to any outstanding Option, (b)
the number of Shares subject to each then outstanding Option (to the
extent not previously exercised), and (c) the price per Share payable
upon exercise of each then outstanding Option, shall all be
proportionately increased or decreased as of the record date for such
stock dividend, stock split-up, or combination of Shares in order to
give effect thereto. Notwithstanding any such proportionate increase
or decrease, no fraction of a Share shall be issued upon the exercise
of an Option or the Shares subject to an Option shall be rounded to the
nearest whole Share and the Option Price shall be rounded to the
nearest full cent.
SECTION 3.5. OTHER CHANGES. If, after the Effective Date, there
shall be any change in the Common Stock or other change in the
capitalization of the Company other than through a stock dividend,
stock split-up, or combination of Shares, including, but not limited
to, a change which results from a merger, consolidation, spin-off, or
other distribution of stock or property of the Company, any
reorganization (whether or not such reorganization is within the
meaning of Section 368 of the Code), or any partial or complete
liquidation of the Company, then if, and only if, the Committee shall
determine that such change equitably requires an adjustment in the
number or kind of Shares then subject to an Option, the Option Price
with respect to an Option, or the number of Shares or class of stock
remaining subject to the Plan, such adjustment as the Committee shall
determine is equitable and as shall be approved by the Board shall be
made and shall be effective and binding for all purposes of such Option
and the Plan. If any member of the Board shall, at the time of such
approval, be an Optionee, he shall not participate in any action in
connection with such adjustment.
SECTION 4. ADMINISTRATION OF THE PLAN.
SECTION 4.1 THE COMMITTEE.
(A) MEMBERSHIP QUALIFICATIONS. Except as provided in this
Section 4.1, at all times the Committee shall consist of not less than
three members designated by the Board from among those Directors who
are not officers or employees of the Company or a Subsidiary and each
of whom is (a) a "non-employee director" within the meaning of Rule
16b-3 under the Exchange Act (a "Non-Employee Director") and (b) an
"outside director" within the meaning of Section 162(m) of the Code (an
"Outside Director"); provided, however, that in addition to the Board's
general authority to amend the Plan as provided for in Section 9.1, the
Board shall have the specific authority to modify or eliminate the
foregoing qualifications or adopt such other qualifications as are
reasonably intended to result in (x) the award of Options, and
transactions with respect to the award or exercise of such Options,
satisfying an exemption from Section 16(b) of the Exchange Act, or any
successor thereto, and (y) compensation recognized by Optionees
qualifying as a deductible expense of the Company under the
"performance-based compensation" exception to compensation deduction
limits which would otherwise be imposed on the Company under Section
162(m) of the Code.
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(B) APPOINTMENT OF OTHER MEMBERS. In the event that one or
more members of the Committee shall fail to meet the qualifications set
forth in Section 4.1(a), the Board shall remove such member or members
and appoint a successor or successors who satisfy such qualifications.
The Board shall act in a reasonably prompt manner to fill any vacancy
on the Committee from among such of its members who are both
Non-Employee Directors and Outside Directors.
(C) VALIDITY OF GRANTS. Notwithstanding the qualifications
for members of the Committee established in Section 4.1(a), any award
of Options made by the Committee in good faith and without the
knowledge that one or more of its members did not satisfy such
qualifications, shall be valid and enforceable by the Optionee even
though the members of the Committee did not, at the time of such award,
satisfy such qualifications.
SECTION 4.2 AUTHORITY OF COMMITTEE. The Plan shall be
administered by the Committee. The Committee shall, subject to the
terms of the Plan (including, specifically, Section 6.1), have the
authority to, in its sole discretion, (a) select eligible individuals
to receive an award of one or more Options and to participate in the
Plan, (b) determine the number of Shares subject to each award and the
Option Price associated therewith, (c) establish terms and conditions
concerning the time of, and conditions precedent to, the exercisability
of each award (including, without limitation, conditions with respect
to the passage of time, financial performance of the Company,
satisfaction of performance or other goals of the Optionee,
restrictions on competitive employment or satisfaction of Company
policies, increase in Fair Market Value of the Common Stock, and any
other conditions which the Committee deems reasonably related to the
satisfaction of the purposes of the Plan), (d) determine the form of
each Option Agreement and all terms and conditions thereof with respect
to each award, including adoption of a formula providing for the award
of Options to Directors at specified intervals, (e) interpret the Plan
and the application thereof and establish such rules and regulations as
it deems necessary or desirable for the administration of the Plan, (f)
modify or cancel any Option or take such action to cause the vesting or
exercisability of any or all outstanding Options to become exercisable
in part or in full for any reason at any time, subject to the
limitation of Section 9.1, and (g) exercise such other authority as is
reasonably related to the administration of and/or the fulfillment of
the purpose of the Plan. All actions, interpretations, rules,
regulations, and conditions taken or established by the Committee shall
be final, binding, and conclusive upon the Company and all Optionees.
SECTION 4.3 ACTIONS BY THE COMMITTEE. A majority of the members
of the Committee shall constitute a quorum. In the absence of specific
rules to the contrary, action by the Committee shall require the
consent of a majority of the members of the Committee, expressed either
orally at a meeting of the Committee or in writing in the absence of a
meeting.
SECTION 4.4 LIMITATION ON LIABILITY AND INDEMNIFICATION OF BOARD.
No Director, no executive officer or other employee of the Company, and
no other agent or representative of the Company shall be liable for any
act, omission, interpretation, construction, or determination made in
connection with the Plan in good faith, and all such persons shall be
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entitled to indemnification and reimbursement by the Company in respect
of any claim, loss, damage, or expense (including attorneys fees)
arising therefrom to the full extent permitted by law, except as
otherwise may be provided in the Company's articles of incorporation
and/or bylaws, and under any directors' and officers' liability
insurance that may be in effect from time to time.
SECTION 5. INDIVIDUALS ELIGIBLE TO BECOME OPTIONEES. Subject to
the provisions of Section 6.1(b), (a) salaried employees of the Company
and any Subsidiary who function in management, administrative, or
professional capacities, (b) prospective salaried employees who have
accepted offers of employment from the Company or a Subsidiary and will
function in a management, administrative, or professional capacity, and
(c) Directors shall be eligible to be selected, in the sole discretion
of the Committee, to participate in, and receive an award of one or
more Options pursuant to, the Plan.
SECTION 6. AWARDING OF OPTIONS.
SECTION 6.1. OPTIONEES.
(A) AWARDS BY COMMITTEE. Options shall be awarded to such
eligible individuals, as determined by the provisions of Section 5, as
the Committee may, from time to time and at any time, select.
Membership of an employee or a prospective employee in a class of
management, administrative, or professional employees or election as a
Director shall not, without specific Committee action and except as
provided in Section 6.1(b), entitle such person to receive an Option
award.
(B) INITIAL AWARDS TO DIRECTORS. On August 7, 2000, each
person who was a Director on such date shall be granted a Non-Qualified
Option to purchase 15,000 shares of Common Stock at an Option Price
equal to the Fair Market Value of the Common Stock on the Effective
Date.
SECTION 6.2 OPTION AGREEMENT. Each Option shall be evidenced by
an Option Agreement, the terms of which may differ from other Option
Agreements. Each Option Agreement evidencing an award of an Option by
the Committee pursuant to Section 6.1(a) shall be signed on behalf of
the Company and, if so provided by the Committee, the Optionee, and
shall set forth with respect to the Option awarded therein, the name of
the Optionee, the date awarded, the Option Price, whether the Option is
an Incentive Stock Option or a Non-Qualified Stock Option, the number
of Shares subject to the Option, and such other terms and conditions
consistent with the Plan as determined by the Committee. Each Option
Agreement evidencing a Non-Qualified Option awarded pursuant to Section
6.1(b) shall be signed on behalf of the Company and shall set forth
with respect to the Option awarded therein, the name of the Optionee,
the date awarded, the Option Price, the number of Shares subject to the
Option, and shall be in such form as the Committee deems appropriate.
The Committee may at the time of award or at any time thereafter impose
such additional terms and conditions on the exercise of such Option as
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it deems necessary or desirable for such Option, or the exercise
thereof, to be exempt under Section 16(b) of the Exchange Act, and the
regulations promulgated thereunder, and to qualify as
"performance-based compensation" under Section 162(m) of the Code, and
the regulations promulgated thereunder. Each Option Agreement shall be
entered into subject to, and shall incorporate by reference, all terms,
conditions, and limitations set forth in the Plan.
SECTION 6.3 TERMS AND CONDITIONS OF THE OPTIONS. In addition to
any other terms, conditions, and limitations specified in the Plan,
each Option awarded hereunder shall, as to each Optionee, satisfy the
following requirements:
(A) DATE OF AWARD. Options must be awarded on or before June
21, 2010.
(B) EXPIRATION. No Incentive Stock Option shall be
exercisable after the expiration of ten years from the date such
Option is awarded. No Non-Qualified Stock Option shall be exercisable
after the expiration of twenty years from the date such Option is
awarded.
(C) PRICE. The Option Price as to any Share subject to an
Option may not be less than the Fair Market Value of the Share on the
date the Option is awarded.
(D) LIMITATIONS ON TRANSFERABILITY. No Option shall be
transferable by the Optionee other than by will or the laws of descent
and distribution, nor can it be exercised by anyone other than the
Optionee during the Optionee's lifetime. No Option may be sold,
transferred, assigned, pledged, hypothecated, encumbered, or otherwise
disposed of (whether by operation of law or otherwise), or be subject
to execution, attachment, or similar process. Upon any attempt to so
sell, transfer, assign, pledge, hypothecate, encumber, or otherwise
dispose of any such award, such award and all rights thereunder shall
immediately become null and void.
(E) EXERCISE. Except as otherwise permitted by the
Committee, or as provided in Section 6.4, or as elsewhere provided in
this Section 6.3(e), Options must be exercised, or shall be forfeited,
in accordance with the following time limitations:
(I) TERMINATION BY REASON OF DEATH. If the Optionee
incurs a Termination of Service by reason of death, any Option held by
such Optionee on the Optionee's date of death may thereafter be
exercised, to the extent it was exercisable on the date of the
Optionee's death, for a period of one year from the date of death or
until the expiration of the stated term of such Option, whichever
period is shorter.
(II) TERMINATION BY REASON OF DISABILITY. If the
Optionee incurs a Termination of Service by reason of Disability, any
Option then held by such Optionee may thereafter be exercised to the
extent it was exercisable on the date of such Termination of Service
for a period of one year from the date of such Termination of Service
or until the expiration of the stated term of such Option, whichever
period is shorter.
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(III) TERMINATION BY REASON OF RETIREMENT. If the
Optionee incurs a Termination of Service by reason of Retirement, any
Option held by such Optionee may thereafter be exercised, to the extent
it was exercisable on the date of the Optionee's Termination of
Service, for a period of two years from the date of such Termination of
Service or until the expiration of the stated term of such Option,
whichever period is shorter.
(IV) OTHER TERMINATION. Unless otherwise determined by
the Committee, if the Optionee incurs a Termination of Service for
Cause, all Options then held by such Optionee shall terminate and may
not be exercised from and after the effective date of such Termination
of Service. If an Optionee incurs a Termination of Service for any
reason other than death, Disability, Retirement, or Cause, any Option
then held by the Optionee, to the extent it was exercisable on the
date of such Termination of Service, may be exercised for a period of
three months from the date of such Termination of Service or until the
expiration of the stated term of such Option, whichever period is
shorter.
(V) DEATH AFTER TERMINATION. If the Optionee dies
subsequent to a Termination of Service for any reason other than Cause,
then, notwithstanding any other limitation on the exercise of the
Optionee's Option set forth in subparagraphs (i), (ii), (iii), or (iv),
any Option held by such Optionee on the Optionee's date of death may
thereafter be exercised, to the extent it was exercisable on such date,
for a period of one year from the date of death or until the expiration
of the stated term of such Option, whichever period is shorter.
(VI) CHANGE IN CONTROL. Notwithstanding any other
provision of this Plan to the contrary, in the event the Optionee
incurs a Termination of Service other than for Cause during the
twelve-month period following a Change in Control, any Option held by
such Optionee may thereafter be exercised by the Optionee, to the
extent it was exercisable at the time of such Termination of Service,
for (A) the longer of (1) one year from the date of such Termination of
Service or (2) such other period as may be provided in the Plan from
such Termination of Service, or (B) until expiration of the stated term
of such Option, whichever period is shorter.
Notwithstanding any other provisions of this Section 6.3(e), the
exercisability of any Option shall be determined in regard to the
status of the Optionee to which the grant was attributable. Options
granted to an Optionee by reason of his Employment shall be exercisable
in accordance with the foregoing provisions of subparagraphs (i)-(v)
with respect to the later of his Termination of Service as an Employee
or, if such Employee is also a Director, his Termination of Service as
a Director. Options granted by reason of the Optionee's status as a
Director shall be exercisable in accordance with the foregoing
provisions of subparagraphs (i)-(v) only with respect to his
Termination of Service as a Director. If an Incentive Stock Option is
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exercised after the expiration of the post-termination exercise periods
that apply for purposes of Section 422 of the Code, such Incentive
Stock Option will thereafter be treated as a Non-Qualified Stock
Option.
(F) MINIMUM HOLDING PERIOD. No Option may be exercised
before the date which is six months after the later of (i) the date on
which the Plan is approved by the shareholders of the Company, or (ii)
the date on which such Option was awarded.
(G) ADDITIONAL RESTRICTIONS RELATING TO INCENTIVE STOCK
OPTIONS. To the extent that the aggregate Fair Market Value
(determined as of the time the Option is awarded) of the Shares for
which Incentive Stock Options are exercisable for the first time by the
Optionee during any calendar year (under the Plan, any Prior Plans, or
any other plan of the Company or a Subsidiary) exceeds $100,000 (or
such other individual limit as may be in effect with regard to
incentive stock options under the Code on the date of award), such
Options shall not be Incentive Stock Options. No Incentive Stock
Option shall be awarded to a Director or to an Optionee who, at the
time such Option is awarded, owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or
any Subsidiary within the meaning of Section 422(b)(6) of the Code
unless (i) at the time the Option is awarded, the Option Price is at
least 110% of the Fair Market Value of the Shares subject to the
Option, and (ii) such Option by its terms is not exercisable after
the expiration of five years from the date such Option is awarded.
(H) LIMITATION ON OPTION AWARDS. No Optionee may be awarded
Options under the Plan in any calendar year with respect to more than
500,000 Shares.
SECTION 6.4. TERMINATION OR LAPSE OF OPTIONS. Each Option shall
terminate or lapse upon the first to occur of (a) the expiration date
set forth in the applicable Option Agreement, (b) the date on which the
Option is deemed to be forfeited or terminated under the terms of the
Plan or an Option Agreement, (c) the applicable date set forth in
Section 6.3(b), or (d) the date which is the day next following the
last day such Option could be exercised under Section 6.3(e).
SECTION 7. EXERCISE AND PAYMENT OF OPTION PRICE.
SECTION 7.1 EXERCISE OF OPTIONS. Each Option shall be exercised
as to all or a portion of the Shares subject to the Option by written
notice to the Company setting forth the exact number of Shares as to
which the Option is being exercised and including with such notice
payment of the Option Price (plus the minimum required tax
withholding). The date of exercise shall be the date such written
notice and payment have been delivered (in cash or in such other manner
as provided in Section 7.2) to the Secretary of the Company either in
person or by depositing said notice and payment in the United States
mail, postage pre-paid and addressed to such officer at the Company's
principal office.
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SECTION 7.2 PAYMENT FOR SHARES. Payment of the Option Price (plus
required tax withholding) attributable to the exercise of an Option or
any portion thereof may be made (a) by tendering cash (in the form of a
check or otherwise) in such amount, (b) with the consent of the
Committee, by tendering, by either actual delivery of Shares owned by
the Optionee or by attestation, Shares with a Fair Market Value on the
date of exercise equal to such amount, (c) with the consent of the
Committee, by instructing the Committee to withhold a number of Shares
having a Fair Market Value on the date of exercise equal to the
aggregate exercise price of such Option, (d) by delivering a properly
executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company the sale or loan proceeds
equal to such amount, or (e) any combination of (a), (b), (c), and (d);
provided, however, that any Shares delivered in payment of the Option
Price pursuant to clause (b) shall have been purchased on the open
market and held by the Optionee for at least six months at the time
of exercise of the Option.
SECTION 7.3 TAX WITHHOLDING. The delivery of Shares to an
Optionee or any other person under the Plan is subject to withholding
of all applicable taxes, and the Committee may condition the delivery
of any Shares or other benefits on satisfaction of applicable
withholding obligations. The Committee, in its discretion, and
subject to such requirements as the Committee may impose prior to the
occurrence of such withholding, may permit withholding obligations to
be satisfied through cash payment by the Optionee or other person
exercising an Option, through the surrender of Shares which the
Optionee or other person already owns, or through the surrender of
Shares to which the Optionee or other person is otherwise entitled
under the Plan.
SECTION 7.4 ISSUANCE OF SHARES. No certificates representing
Shares shall be issued until full payment therefor has been made. An
Optionee shall have all of the rights of a shareholder of the Company
holding the Common Stock that is subject to such Option (including, if
applicable, the right to vote the Shares and the right to receive
dividends) when the Optionee has given written notice of exercise, has
paid in full for such Shares, has, if requested, given the
representation described in Section 12.2, and a certificate
representing the Shares have been issued by the registrar and transfer
agent for the Common Stock. Notwithstanding any other provision of the
Plan or agreements made pursuant thereto, the Company shall not be
required to issue or deliver any certificate or certificates for Shares
under the Plan prior to fulfillment of all of the following conditions:
(a) Listing or approval for listing upon notice of issuance
of such Shares on the exchange or over-the-counter market as may at the
time be the principal market for the Common Stock;
(b) Any registration or other qualification of the Shares
under any state or federal law or regulation, or the maintaining in
effect of any such registration or other qualification which the
Committee shall, in its absolute discretion upon the advice of
counsel, deem necessary or advisable; and
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(c) Obtaining any other consent, approval, or permit from any
state or federal governmental agency which the Committee shall, in its
absolute discretion after receiving the advice of counsel, determine to
be necessary or advisable.
SECTION 8. CHANGE IN CONTROL.
SECTION 8.1 ADJUSTMENT OF OPTIONS.
(A) VESTING AND CASH PAYMENT. In the event of a Change in
Control,
(i) all Options outstanding on the date on which such
Change in Control has occurred (the "Change in Control Date")
shall, to the extent not then exercisable or vested,
immediately become exercisable in full, and
(ii) each Optionee may elect (the Optionee's "Election
Right") with respect to each Option held by such Optionee on
the Change in Control Date to surrender such Option for an
immediate lump sum cash payment in an amount equal to the
product of (A) the number of Shares then subject to the Option
as to which the election is being exercised multiplied by (B)
the excess, if any, of (1) the greater of (a) the Change in
Control Price or (b) the highest Fair Market Value of a Share
on any day in the 60-day period ending on the Change in
Control Date, over (2) the Option Price of such Option. For
purposes of this Section 8.1(a), the "Change in Control Price"
shall mean, if the Change in Control is the result of a tender
or exchange offer or a Corporate Transaction (as defined in
Section 8.2(c)), the highest price per Share paid in such
tender or exchange offer or Corporate Transaction, and, to the
extent that the consideration paid in any such transaction
consists all or in part of securities or other noncash
consideration, the value of such securities or other noncash
consideration shall be determined in the sole discretion of
the Committee.
(B) ELECTION. The exercise of an Election Right must be in
writing, specify the Option or Options and the number of Shares as to
which the election is being exercised, and be delivered to the
Secretary of the Company either in person or by depositing said notice
and payment in the United States mail, postage pre-paid and addressed
to such officer at the Company's home office on or before the 60th day
following the Change in Control Date.
(C) PAYMENT DATE. All payments due an Optionee pursuant to
the provisions of this Section 8.1 shall be made by the Company on or
before the 5th business day following the date on which the Optionee's
election has been delivered to the Company pursuant to Section 8.1(b).
(D) POOLING CONSIDERATIONS. Notwithstanding any other
provision of this Section 8.1, if the grant or the exercise of an
Optionee's Election Right or payment of cash provided for in this
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Section 8.1 would make a Change in Control transaction ineligible for
pooling-of-interests accounting treatment under APB No. 16, that, but
for the nature of such grant or exercise of Election Rights or payment
of cash, would otherwise be eligible for such pooling-of-interests
accounting treatment, the Committee shall have the right and authority
to substitute for the cash payments to be made to the Optionee pursuant
to Section 8.1(a), Common Stock with a Fair Market Value, determined as
of the date of delivery of such Shares, equal to the cash that would
otherwise be payable to such Optionee in connection with the exercise
of an Optionee's Election Right hereunder or, to the extent necessary
to preserve such pooling-of-interests accounting treatment, to
otherwise modify, eliminate, or terminate such Election Right.
SECTION 8.2 DEFINITION OF "CHANGE IN CONTROL." For purposes of
the Plan, a "Change in Control" means the happening of any of the
following events:
(A) The acquisition by any individual, entity, or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act) (a "Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either (i)
the then outstanding shares of common stock of the Corporation (the
"Outstanding Corporation Common Stock") or (ii) the combined voting
power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the
"Outstanding Corporation Voting Securities"); excluding, however, the
following: (A) any acquisition directly from the Corporation other than
an acquisition by virtue of the exercise of a conversion privilege
unless the security being so converted was itself acquired directly
from the Corporation, (B) any acquisition by the Corporation, (C) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Corporation or any entity controlled by the
Corporation, (D) any acquisition pursuant to a transaction which
complies with clauses (i), (ii), and (iii) of paragraph (c) of this
Section 8.2, (E) except as provided in paragraphs (d) and (e), any
acquisition by any of the Woodson Entities or any of the Smith
Entities, or (F) any increase in the proportionate number of shares of
Outstanding Corporation Common Stock or Outstanding Corporation Voting
Securities beneficially owned by a Person to 20% or more of the shares
of either of such classes of stock if such increase was solely the
result of the acquisition of Outstanding Corporation Common Stock or
Outstanding Corporation Voting Securities by the Corporation; provided,
however, that this clause (F) shall not apply to any acquisition of
Outstanding Corporation Common Stock or Outstanding Corporation Voting
Securities not described in clauses (A), (B), (C), (D), or (E) of this
paragraph (a) by the Person acquiring such shares which occurs after
such Person had become the beneficial owner of 20% or more of either
the Outstanding Corporation Common Stock or Outstanding Corporation
Voting Securities by reason of share purchases by the Corporation; or
(B) A change in the composition of the Board such that the
individuals who, as of the Effective Date, constitute the Board (such
Board shall be hereinafter referred to as the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board;
provided, however, for purposes of the Plan, that any individual who
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becomes a member of the Board subsequent to the Effective Date whose
election, or nomination for election by the Corporation's shareholders,
was approved by a vote of at least a majority of those individuals who
are members of the Board and who were also members of the Incumbent
Board (or deemed to be such pursuant to this proviso) shall be deemed
to be and shall be considered as though such individual were a member
of the Incumbent Board, but provided, further, that any such individual
whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board shall not be so deemed or
considered as a member of the Incumbent Board; or
(C) Consummation of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially
all of the assets of the Corporation or the acquisition of the assets
or securities of any other entity (a "Corporate Transaction");
excluding, however, such a Corporate Transaction pursuant to which (i)
all or substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Corporation Common
Stock and Outstanding Corporation Voting Securities immediately prior
to such Corporate Transaction will beneficially own, directly or
indirectly, more than 60% of, respectively, the outstanding shares of
common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such
Corporate Transaction (including, without limitation, a corporation
which as a result of such transaction owns the Corporation or all or
substantially all of the Corporation's assets either directly or
through one or more subsidiaries) (the "Resulting Corporation") in
substantially the same proportions as their ownership, immediately
prior to such Corporate Transaction, of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities, as the case
may be, (ii) no Person (other than the Corporation, any employee
benefit plan (or related trust) of the Corporation, any Woodson Entity,
any Smith Entity, or such Resulting Corporation) will beneficially own,
directly or indirectly, 20% or more of, respectively, the outstanding
shares of common stock of the Resulting Corporation or the combined
voting power of the then outstanding voting securities of such
Resulting Corporation entitled to vote generally in the election of
directors except to the extent that such ownership existed with respect
to the Corporation prior to the Corporate Transaction, and (iii)
individuals who were members of the Incumbent Board will constitute at
least a majority of the members of the board of directors of the
Resulting Corporation; or
(D) the Woodson Entities acquire beneficial ownership of more
than 35% of the Outstanding Corporation Common Stock or Outstanding
Corporation Voting Securities or of the outstanding shares of common
stock or the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as
the case may be, of the Resulting Corporation; or
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(E) the Smith Entities acquire beneficial ownership of more
than 35% of the Outstanding Corporation Common Stock or Outstanding
Corporation Voting Securities or of the outstanding shares of common
stock or the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as
the case may be, of the Resulting Corporation; or
(F) The approval by the shareholders of the Corporation of a
complete liquidation or dissolution of the Corporation.
For purposes of this Section 8.2, the term "Woodson Entities" shall
mean Aytchmonde P. Woodson, Leigh Yawkey Woodson, and Alice Richardson
Yawkey, members of their respective families and their respective
descendants (the "Woodson Family"), heirs or legatees of any of the
Woodson Family members, transferees by will, laws of descent or
distribution, or by operation of law of any of the foregoing (including
any such transferees) (including any executor or administrator of any
estate of any of the foregoing), any trust established by any of
Aytchmonde P. Woodson, Leigh Yawkey Woodson, or Alice Richardson
Yawkey, whether pursuant to last will or otherwise, any partnership,
trust, or other entity established primarily for the benefit of, or any
other Person the beneficial owners of which consist primarily of, any
of the foregoing or any Affiliates or Associates of any of the
foregoing or any charitable trust or foundation to which any of the
foregoing transfers or may transfer securities of the Corporation
(including any beneficiary or trustee, partner, manager, or director of
any of the foregoing, or any other Person serving any such entity in a
similar capacity).
For purposes of this Section 8.2, the term "Smith Entities" shall mean
David B. Smith and Katherine S. Smith, members of their respective
families and their respective descendants (the "Smith Family"), heirs
or legatees of any of the Smith Family members, transferees by will,
laws of descent or distribution, or by operation of law of any of the
foregoing (including of any such transferees) (including any executor
or administrator of any estate of any of the foregoing), any trust
established by either of David B. Smith or Katherine S. Smith, whether
pursuant to last will or otherwise, any partnership, trust, or other
entity established primarily for the benefit of, or any other Person
the beneficial owners of which consist primarily of, any of the
foregoing or any Affiliates or Associates of any of the foregoing or
any charitable trust or foundation to which any of the foregoing
transfers or may transfer securities of the Corporation (including any
beneficiary or trustee, partner, manager, or director of any of the
foregoing, or any other Person serving any such entity in a similar
capacity).
For purposes of this Section 8.2, the terms "Affiliate" and "Associate"
shall have the meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act as in effect on
the date of this Plan.
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SECTION 9. AMENDMENT AND TERMINATION OF PLAN.
SECTION 9.1 AMENDMENT OF PLAN. The Board may amend the Plan from
time to time and at any time; provided, however, that (a) except as
specifically provide herein, no amendment shall, in the absence of
written consent to the change by the affected Optionee, adversely
affect such Optionee's rights under any Option which has been awarded
prior to the amendment except to the extent such amendment is, in the
sole opinion of the Committee, required to comply with any stock
exchange rules, accounting rules, or laws applicable to the Company or
the Plan, (b) no amendment with respect to the maximum number of Shares
which may be issued pursuant to Options under the Plan or to any
individual in any calendar year made be made unless approved by a
majority of the Shares entitled to vote at a meeting of the
shareholders if such amendment would, in the absence of such
approval and in the sole opinion of the Committee, have an adverse
effect on the Company under applicable tax or securities laws or
accounting rules, and (c) no amendment shall be made without the
approval of the Company's shareholders to the extent such approval
is required by applicable law or stock exchange rules.
SECTION 9.2 TERMINATION OF PLAN. The Plan shall terminate on the
first to occur of (a) June 21, 2010 or (b) the date specified by the
Board as the effective date of Plan termination; provided, however,
that the termination of the Plan shall not limit or otherwise affect
any Options outstanding on the date of termination.
SECTION 10. EFFECTIVE DATE. Notwithstanding any provision of this
Plan to the contrary, the Plan shall not be effective, and any Options
awarded under the Plan shall be null and void, unless the adoption of
the Plan is approved at the annual meeting of the Company's
shareholders next following the Effective Date by the majority of the
shares entitled to vote at such meeting.
SECTION 11. INVESTMENT INTENT. The Committee may require each
Optionee or other person purchasing or receiving Shares pursuant to the
exercise of an Option, to represent to and acknowledge that the Shares,
if not registered by the Company under the Securities Act of 1933 (the
"1933 Act"), may not be freely transferable by the holder after
exercise of the Option, that by acceptance of an Option or Shares that
such Optionee or other person understands that the application of the
1933 Act may restrict the transfer of such Shares, and that Shares
which are unregistered under the 1933 Act will be acquired for the
account of the Optionee or other person for investment only and not
with a view to offer for sale or for sale in connection with the
distribution or transfer thereof. Certificates issued by the Company
and representing Shares acquired pursuant to the exercise of an Option
may include any legend or legends which the Company deems appropriate
to reflect any restrictions imposed under the 1933 Act.
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SECTION 12. AVAILABILITY OF INFORMATION.
SECTION 12.1. REGISTERED SHARES. If the Shares subject to an
Option have been registered pursuant to the 1933 Act, the Company shall
provide the Optionee with such information as may be required under the
applicable registration form on which such Shares were registered.
SECTION 12.2. UNREGISTERED SHARES. If the Shares subject to an
Optionee's Option are not registered or to be registered under the 1933
Act, the Company shall furnish each Optionee with (a) a copy of the
Plan and the Company's most recent annual report to its shareholders at
the time the Option Agreement is delivered to the Optionee and (b) a
copy of each subsequent annual report and proxy statement, on or about
the same date as such report shall be made available to shareholders of
the Company. Whether or not the shares are, or are to be, registered
under the 1933 Act, the Company will furnish, upon written request
addressed to the Secretary of the Company, but at no charge to the
Optionee or any duly authorized representative of the Optionee, a copy
of the Plan and copies of all reports filed by the Company with the
Securities and Exchange Commission, including, but not limited to, the
Company's annual reports on Form 10-K, its quarterly reports on Form
10-Q, and its proxy statements. Notwithstanding the foregoing
provisions of this Section 12, the Company shall not be required to
furnish any such report or statement if a copy of such report is
otherwise provided to the Optionee in connection with another plan
maintained by the Company or such Optionee's status as a shareholder of
the Company.
SECTION 13. LIMITATION OF RIGHTS.
SECTION 13.1. CONDITIONS OF SERVICE. The Plan shall not
constitute an contract of employment and participation in or
eligibility for participation in the Plan shall not confer upon any
employee the right to be continued as an employee of the Company or any
present or future Subsidiary or as a Director. The Company and each
Subsidiary hereby expressly reserves the right to terminate the
employment of any employee, with or without cause, as if the Plan and
any Options awarded pursuant to it were not in effect.
SECTION 13.2. COMPANY ASSETS. Neither the Optionee nor any other
person shall, by reason of receiving an award of an Option under the
Plan acquire any right, title, or interest in any assets of the Company
or any Subsidiary by reason of such Option or the Plan. To the extent
the Optionee or any other person shall acquire a right to receive
payments from the Company pursuant to an Option Agreement or the
Plan, such right shall be no greater than the right of any unsecured
general creditor of the Company.
SECTION 14. COMPLIANCE WITH APPLICABLE LAWS. Notwithstanding any
provision of this Plan to the contrary, if at any time the Company
shall be advised by its counsel that the exercise of any Option or the
delivery of Shares upon the exercise of an Option is required to be
approved, listed, registered, or qualified under any securities law,
that certain actions must be taken under the rules of any stock
exchange or over-the-counter market, that such exercise or delivery
-17-
must be accompanied or preceded by a prospectus or similar circular
meeting the requirements of any applicable law, or that some other
action is required to be taken by the Company in compliance with
applicable law, the Company will use reasonable efforts to take all
actions required within a reasonable time, but exercise of the Options
or delivery by the Company of certificates for Shares may be deferred
until the Company shall be in compliance with all such requirements.
SECTION 15. GOVERNING LAW. The Plan, each Option awarded
hereunder and the related Option Agreement, and all determinations
made and actions taken pursuant thereto, to the extent not otherwise
governed by the Code or the laws of the United States, shall be
governed by the internal laws of the State of Wisconsin and construed
in accordance therewith without giving effect to the principles of
conflicts of laws applied by any state.
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PROXY
WAUSAU-MOSINEE PAPER CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING
TO BE HELD APRIL 19, 2001
The undersigned hereby appoint(s) San W. Orr, Jr., Richard L. Radt and Thomas
J. Howatt, and each of them, proxies of the undersigned, with full power of
substitution, to vote all shares of common stock of Wausau-Mosinee Paper
Corporation that the undersigned is entitled to vote at the annual meeting of
shareholders to be held on April 19, 2001 and at any adjournment thereof (the
"Annual Meeting"). The proxies have the authority to vote such stock as
directed on the reverse side hereof with respect to the proposals set forth in
the Proxy Statement with the same effect as though the undersigned were
present in person and voting such shares. For participants in the Dividend
Reinvestment and Stock Purchase Plan, Common Stock Purchase Plan and the
Corporations' 401(k) plan, the proxy also serves as voting instructions to the
plan administrator or trustee, as applicable, of such plans to vote the shares
of common stock beneficially owned by the participants in each plan. The
undersigned hereby revokes all proxies heretofore given to vote at the Annual
Meeting and any adjournment thereof.
PLEASE INDICATE ON THE REVERSE SIDE OF THIS CARD HOW YOUR STOCK IS TO BE
VOTED. IF NO SPECIFIC VOTING INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED
BY THIS PROXY WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS.
(Continued and to be signed on reverse side.)
WAUSAU-MOSINEE PAPER CORPORATION
PLEASE MARK YOUR VOTE IN THE FOLLOWING MANNER USING DARK INK ONLY <square>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED IN PROPOSAL 1
AND FOR PROPOSAL 2.
1. Election of Directors: For all except the nominees
For All Withhold All written below
HARRY R. BAKER, DENNIS J. KUESTER <square> <square> ______________________
AND RICHARD L. RADT.
For Against Abstain
2. To approve the 2000 Stock Option Plan <square> <square> <square>
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting.
Please sign exactly as name appears at left.
Dated _________________________, 2001
_________________________________________
Signature
________________________________________
Signature if held jointly
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full
title. If a corporation, please sign in full corporate name by president or
other authorized officer.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.